Thirty years ago, five independent wholesale distributors envisioned a group of their peers standing together as equals and becoming a powerful force in the plumbing and heating industry. It was their belief that each member of a buying group should be an equal owner with an equal voice, yet they should still be able to keep their individual identities.
Now on WIT's 30th anniversary, their dreams have become reality. Members of the WIT buying group have truly become a force in the industry, with more than $2.5 billion in aggregate sales.
It started by accident. One of the five founders of the company received a vendor invoice meant for a larger competitor. Both companies were ordering truckload quantities, but paying a different price.
“I had been told the biggest discounts available were for truckload purchases,” recalls Peck Johnston, chairman, Johnston Supply, Marion, Ohio, one of the founding members of WIT. During a meeting with a vendor he was told his competitor bought hundreds of truckloads per year, while Johnston Supply bought maybe 30 truckloads a year. “I realized that to remain competitive I had to find a way to order more truckloads,” Johnston says.
At a meeting with four friends, who were also independent plumbing and heating wholesalers, Johnston suggested they join together to increase their purchasing power.
“We have been successful because we have the same objective today that we had 30 years ago,” Johnston says. “ If someone joins WIT & Co. today, his stock ownership is the same as mine from 30 years ago. I don't know where we - or a lot of other independent distributors - would be today if not for WIT.”
“Our core purpose from the beginning has been to help our owner-members remain competitive and independent, ” says Justin Dunscomb, executive vice president of WIT & Co.
Plumbing has historically been WIT's largest volume category, but HVAC has always been a large part of WIT. Today it is the fastest growing segment of WIT's business, and WIT's HRA division for HVAC products is attracting very successful HVAC distributors, he says.
WIT offers innovative solutions to both its members and approved vendors in the areas of marketing and electronic commerce, but the true key to WIT's success is the involvement of its members and WIT's talent for relationship management, Dunscomb says.
QUALITY MEMBERSHIPIn its founding year, WIT grew to 15 distributor members. Today, its current membership of 79 distributors is just slightly short of WIT's 85 member goal.
“We are trying to strategically fill those limited open slots,” Dunscomb says. “What we are striving for is to be major players in our markets, and have good geographic coverage across the country.”
“WIT stands for Wholesale distributors, Investing together, and trusting each other,” says Charles (Charlie) Wallace, chairman, president and owner of Ross Supply, Marion, Ind., one of the five founding distributor firms
“One of the first things looked for in a potential distributor member is its financial strength,” Dunscomb says. “We look for companies that pay their bills. Then we look for companies that will fit into our culture and believe in supporting the group's efforts.”
“We also look at the distributor's involvement in the industry,” adds Jeff Smalley, WIT's director of business development. “We have a strong history of leadership in the industry with our members.” The involvement of WIT's members in American Supply Association (ASA), Heating, Airconditioning, Refrigeration Distributors International (HARDI) and other industry associations is extensive, including vice presidents, trustees, and board members at the national and regional level.
AFFILIATED VENDORSFrom 31 in 1985, to more than 150 today, the number of WIT's vendor partners has grown steadily over the years. WIT's tremendous growth in HVAC has helped stimulate growth in the number of approved vendors as new product categories were added.
The group strives to provide its members with two vendor choices per product category, Dunscomb says. It is also important to limit vendor sources and focus the group's efforts. “We deliver results to our approved vendors, and in return, our vendors treat us as the national entity we have become.”
SERVICESCollective buying, accompanied by competitive rebates, is the most important service WIT provides its distributor members, Dunscomb says.
A close second in importance is networking opportunities that enable distributors to discuss best practices and learn from each other, he says.
“WIT has a dedicated and talented headquarters staff that is focused on service,” Smalley says. “Even though we rely on the involvement of distributors in terms of direction and leadership, we try to make sure their involvement does not take away from their business.”
WIT also provides marketing services to vendors and distributors to help move product through the channel, Smalley points out. “Our marketing services function as a marketing arm for vendors.”
Over the years other services have been added, such as insurance programs and technology solutions, to reduce the cost of transactions between members and vendors. “These and other added services help distinguish WIT from other groups,” Dunscomb says.
Strong communications between WIT and its owner-members, as well as between WIT and approved vendors, make these services possible and contribute to their success, Smalley says. “Our communication and networking efforts reach their pinnacle at our annual meetings,” he notes. “Our annual vendor conference is rated as the industry's best by our members and approved vendors.”
STRUCTUREWIT's distributor members are the owners of the company. They select seven board members based on geographic locations and demographic profile to ensure the entire group is represented. In addition, WIT members serve on nine committees, including vendor relations, marketing, technology, finance, insurance and education.
“These committees keep us aware of the distributor's perspective,” Dunscomb says.
SUPPLY HOUSE TIMES contacted some WIT distributor members and affiliated vendors for comments about the group.
CHRIS LUTE, president, Lute Supply, Portsmouth, Ohio:In 1993, I joined WIT for the added buying power and networking opportunities, but I have to admit there was also a certain amount of peer pressure. At the time, I was president of the Central Wholesalers Association and on the ASA board of directors where I met other successful distributors who I respected and who were members of the WIT group.
The number one reason I joined was the buying power and rebates we would receive. I have found that an almost equal benefit is the knowledge that we all gain from each other through networking. As equal owners of WIT we develop trust in each other. I've said that another distributor will openly share 95% of what he knows or thinks, but it's the other 5% you really need to know. The WIT forum facilitates the delivery of that other 5%.
As WIT's new president, I want to continue to cultivate the success that we have had. To accomplish that, we must maintain and grow our strong presence in the marketplace. Our company enjoys the benefits from insurance and marketing programs, and we continue to find ways to cut cost from our distribution chain through technology. We want to continue to differentiate ourselves from other buying groups and be leaders in marketing and technology.
Another item high on my list for growth is our HVAC division, HRA. We have a lot to offer quality HVAC distributors, and I would like WIT to be recognized as the leading HVAC buying group.
Also, I want to continue to increase distributor involvement and find more ways that WIT can be more valuable to both vendors and distributors.
JOE WHITE, chairman, Castle Supply Co., Pinellas Park, Fla.In April 1975, I joined WIT because I was confident it was the thing to do. WIT membership has been extremely beneficial to our company, which would not be where it is today if not for WIT. One thing that was greatly enhanced was our purchasing. When I became a member, I became very involved and that helped me learn who's who in the industry regarding manufacturers and how to build relationships with them over the years. That has been one of the greatest benefits.
PACE ROBINSON, chairman/CEO, Modern Supply, Knoxville, Tenn.Modern Supply joined WIT about 26 years ago. As a small independent wholesaler we could see the coming onslaught from the “national” players and the clout they brought with them. We needed to take a step that would help us compete on a more level playing field. Also, my father Mitchell Robinson had foresight and I believe he had a lot of respect for the companies that were already in the group.
The most understated benefit from our membership in WIT has been the opportunity to network and learn from others in our industry. We have also obtained this benefit from our trade association memberships, but with WIT it has been more intimate, more in-depth, and more ongoing.
The challenges facing WIT are to continue growing and attracting the top-rated distributors in this industry and to continue to do the things that differentiate WIT from all other buying groups.
BILL GLOCKNER, president/CEO, Hirsch Pipe & Supply, San Juan Capistrano, Calif.:By joining WIT in 1991, we were able to gain additional rebates on product lines and exposure to other quality distributors across the country so we could learn best practices. I think there is a benefit to being among a group of innovative distributors, using that association to benchmark where your company is and where you can improve.
We have invested in WIT's marketing efforts, which are helping member distributors approach the market in a more professional and consistent way.
One of the best ways independent distributors can keep pace in this industry is to band together with other independent distributors to remain a viable force.
CHARLES (CHARLIE) WALLACE, chairman, president and owner of Ross Supply, Marion, Ind.:When I got involved 18 years ago, we had about 35 members, compared to 79 today. What is unique about WIT is that its wholesalers own it. Membership in WIT means a tremendous amount to me personally and to Ross Supply. I came with limited knowledge of this industry in terms of plumbing and heating. Certain distributors including Bill Sass and Dan Jones took me under their wings. We know each other and can share with each other.
Ross Supply is a small independent wholesaler with two locations. Some huge companies belong to WIT, and we are able to share their knowledge and experience. The programs we negotiate benefit all of us, regardless of our size.
WIT sponsors and negotiates marketing programs with vendors that we can pass as turnkey to our employees. Without WIT, these programs would require a full time marketing position at our company.
COLIN PERRY, president, Rampart Plumbing & Heating Supply, Colorado Springs, Colo.:We joined WIT in 1996. We were in the process of acquiring another company that was a member, Water Systems Inc., in Denver, and we had also submitted an application to WIT. Manufacturers and reps had told us we were buying just as well on our own as we would belonging to a group. We found that, in fact, there was a very significant difference.
Rebates and purchasing power are big factors in belonging to a group. But networking and camaraderie are also important benefits. WIT has continually nudged its members to stay up with technology. Our company has definitely developed much quicker with gentle nudging from WIT than we would have on our own.
In terms of marketing efforts, prior to WIT our idea of marketing was T-shirts or free baseball caps. We have become much more sophisticated.
WIT is now looking at technology and e-commerce and trying to get all of its independent wholesalers to figure out where we need to be five to 10 years from now. WIT will help us get to where we need to be.
MORRIS CREGGER, CEO, Cregger Co., West Columbia, S.C.We've been in WIT since 1984. I was visiting with a good friend of mine, Mitch Robinson, at an SWA cocktail party and he told me to stop talking and just send in my check to join. I have never regretted it. Sometimes it's best to listen.
One of the benefits for our firm has been the ability to exchange information with other distributors. We are a fairly young company. I started in business in October 1978. When I joined WIT there were probably 23 total companies and I was the smallest in volume. I was immediately given the opportunity to have conversations with people who had been in business 25 to 30 years. They had made the mistakes I was getting ready to make.
CLARA JO, national program manager, TakagiWe have been affiliated with WIT since July 2003. The biggest advantage to us is being able to reach distributors in areas we could not cover. WIT's members are everywhere in the United States. The number of companies and geographic area covered by these companies is a benefit to us.
We need to work together. We see great opportunities, and would like to see WIT membership continue to grow.
BILL BLAINE, senior vice president/sales, Elkay ManufacturingElkay has been dealing with WIT about 12 to 15 years. I have been personally dealing with WIT for about 20 years. Prior to this I worked for U.S. Brass, which I believe was one of WIT's original vendors.
Among the benefits Elkay enjoys from WIT is the support of the entire membership and the efforts among each of them to support their approved vendors in whatever way they can, along with the overall buying power created by the cooperation between the members.
ED ISMERT, director of marketing, Sioux ChiefA WIT vendor since 1991, we have enjoyed growth above and beyond what we would call the traditional wholesale segment. Loyalty is a big benefit. WIT selects vendors from certain categories to focus purchases and create an efficient marketing channel.
WIT makes it very easy to broadcast to the group certain specials or new product announcements. Getting independents to think as one is a tough challenge, but then part of what makes these members great is their entrepreneurial spirit.
JON DARTT, vice president of trade channel development, Delta Faucet Co.Delta became affiliated with WIT in 1998. One of the benefits of this association is the opportunity to meet with their members at least once a year in face-to-face discussions about the business in each member's respective market. For our senior management team to travel to each wholesaler's market would take months. The annual meeting allows us to see all members in two or three days.
The members of WIT are a unified group and they act as a team to drive purchases and sales for the manufacturer. WIT provides us with the perfect opportunity to run promotions that are focused and targeted to their members and the secondary customer.
It has a very professional and knowledgeable headquarters staff that assists the manufacturer with tracking and reporting each member's progress, provides marketing support for running promotions that drive sales and brand recognition, discusses and resolves member issues and communicates to the members on behalf of the manufacturer. This affiliation provides Delta the opportunity to communicate our message to 400 locations in a cost-effective manner. We have seen significant and consistent growth with WIT since we became partners.
STEVE ADAMS, national account manager/wholesale division, Brass Craft Mfg.:Brass Craft is proud to be associated with WIT & Co. for more than 24 years. WIT's membership during this period has expanded nationwide. It is made up of a strong network of successful independent wholesale distributors. Congratulations from all the employees of Brass Craft on WIT's 30th anniversary.
GREG SCHLOTMAN, vice president/sales, Moen Inc.Moen has been affiliated with WIT since 1991, and has enjoyed the benefits of strong group relationships and member support throughout the past 13 years. This has translated into significant volume growth over the years, often outpacing the average growth of the market.
The ever-changing dynamics within all channels of the marketplace provide a great platform for WIT membership to leverage their national presence.
TRACY THOMSEN, director of sales, Little Giant Pump Co.We have been doing business with the WIT group for 11 years. Their direction kind of mirrors ours. We are heavily focused on both the plumbing and HVAC industries. As WIT moves more into HVAC, it's a natural fit for us. Beyond being a buying group, WIT supports its vendors with outstanding marketing programs developed by its marketing people. <<
Sidebar: Founding FathersIn 1974, these five companies became the founding fathers of WIT & Co.:
Johnston Supply, Ohio
May Co., Illinois
Field & Shorb, Illinois
Iowa Pipe & Supply, Iowa
Ross Supply, Indiana
Sidebar: ASA InvolvementWIT member-distributors have a long tradition of being involved with the American Supply Association (ASA). The first year a WIT member became a president of ASA was 1982, and the leadership positions have continued until today. WIT members have also held other titles in ASA including trustee appointments, board seats, chairman positions and vice president positions.
PAST AND PRESENT ASA PRESIDENTS FROM THE WIT GROUP INCLUDE:
William “Bud” Meyer Wm. F. Meyer Co.
Aurora, Ill., 1980
Richmond, Va., 1982
John McDonald III Brock McVey Co.
Lexington, Ky., 1984
APR Supply Co. Inc. Lebanon, Pa., 1991
Cregger Co. Inc.
Columbia, S.C., 1997
Consolidated Supply Co.
Portland, Ore., 1999
Security Supply Corp.
Selkirk, N.Y., 2000
The H.W. Theis Co.
Brookfield, Wis., 2004
Modern Supply Co. Inc.
Knoxville, Tenn., 2005